“INVESTORS” who haven’t learned their lessons?

[SDEngineer]

[quote=knumb]

Real estate investing only makes good sense in an appreciating market, IMO. Otherwise the rent you get is not going to cover the cost of capital, the maintenance, and taxes. It’s sure not going to cover the hassle of dealing with renters.

[/quote]

This hasn’t been true in the past, and I don’t see any reason why it is true now.

When bubbles burst, they overshoot to the downside – there’s a window during this period when it is generally possible to find a property – especially at the low end – which will cash flow immediately as a rental.

Interestingly, in the ’96-’98 timeframe we saw lots of real estate investor activity (the buy-and-hold re investors, not the flippers of the bubble peak). This activity started well before it was apparent the bottom was in and appreciation had started up again.

[davelj]

[quote=dbapig]”It’s just pathetic,” said Jenkins, 53. “Investors are going out there and outbidding everyone.”

…
…[/quote]

This is good, right? It suggests a couple of things:

(1) If most properties are facing the same issues (which is what we’re hearing), there’s a boatload of money out there willing to buy stuff up at the lower end. And the folks that get outbid are just moving on to other properties.
(2) Foreclosures are selling faster than they’re being created, which is why inventory is shrinking.

Don’t get me wrong – as I’ve said many times – I think we’ve still got downside ahead of us. But clearly the buying activity we’re seeing at the lower end is better for the economy in general terms than if we weren’t seeing it, right?

Also, almost all of these newly-purchased REO properties will need work done: painting, new carpet, etc. And there will be lots of new furniture purchases as well. And mortgage brokers and real estate agents will get paid here (albeit a fraction of what they were making during the heyday). Again, we’re not headed back to 2005, but all of this foreclosure sale activity will put a little boost into the economy that wouldn’t have been there otherwise.

[davelj]

[quote=dbapig]”It’s just pathetic,” said Jenkins, 53. “Investors are going out there and outbidding everyone.”

…
…[/quote]

This is good, right? It suggests a couple of things:

(1) If most properties are facing the same issues (which is what we’re hearing), there’s a boatload of money out there willing to buy stuff up at the lower end. And the folks that get outbid are just moving on to other properties.
(2) Foreclosures are selling faster than they’re being created, which is why inventory is shrinking.

Don’t get me wrong – as I’ve said many times – I think we’ve still got downside ahead of us. But clearly the buying activity we’re seeing at the lower end is better for the economy in general terms than if we weren’t seeing it, right?

Also, almost all of these newly-purchased REO properties will need work done: painting, new carpet, etc. And there will be lots of new furniture purchases as well. And mortgage brokers and real estate agents will get paid here (albeit a fraction of what they were making during the heyday). Again, we’re not headed back to 2005, but all of this foreclosure sale activity will put a little boost into the economy that wouldn’t have been there otherwise.

[davelj]

[quote=dbapig]”It’s just pathetic,” said Jenkins, 53. “Investors are going out there and outbidding everyone.”

…
…[/quote]

This is good, right? It suggests a couple of things:

(1) If most properties are facing the same issues (which is what we’re hearing), there’s a boatload of money out there willing to buy stuff up at the lower end. And the folks that get outbid are just moving on to other properties.
(2) Foreclosures are selling faster than they’re being created, which is why inventory is shrinking.

Don’t get me wrong – as I’ve said many times – I think we’ve still got downside ahead of us. But clearly the buying activity we’re seeing at the lower end is better for the economy in general terms than if we weren’t seeing it, right?

Also, almost all of these newly-purchased REO properties will need work done: painting, new carpet, etc. And there will be lots of new furniture purchases as well. And mortgage brokers and real estate agents will get paid here (albeit a fraction of what they were making during the heyday). Again, we’re not headed back to 2005, but all of this foreclosure sale activity will put a little boost into the economy that wouldn’t have been there otherwise.

[davelj]

[quote=dbapig]”It’s just pathetic,” said Jenkins, 53. “Investors are going out there and outbidding everyone.”

…
…[/quote]

This is good, right? It suggests a couple of things:

(1) If most properties are facing the same issues (which is what we’re hearing), there’s a boatload of money out there willing to buy stuff up at the lower end. And the folks that get outbid are just moving on to other properties.
(2) Foreclosures are selling faster than they’re being created, which is why inventory is shrinking.

Don’t get me wrong – as I’ve said many times – I think we’ve still got downside ahead of us. But clearly the buying activity we’re seeing at the lower end is better for the economy in general terms than if we weren’t seeing it, right?

Also, almost all of these newly-purchased REO properties will need work done: painting, new carpet, etc. And there will be lots of new furniture purchases as well. And mortgage brokers and real estate agents will get paid here (albeit a fraction of what they were making during the heyday). Again, we’re not headed back to 2005, but all of this foreclosure sale activity will put a little boost into the economy that wouldn’t have been there otherwise.

[davelj]

[quote=dbapig]”It’s just pathetic,” said Jenkins, 53. “Investors are going out there and outbidding everyone.”

…
…[/quote]

This is good, right? It suggests a couple of things:

(1) If most properties are facing the same issues (which is what we’re hearing), there’s a boatload of money out there willing to buy stuff up at the lower end. And the folks that get outbid are just moving on to other properties.
(2) Foreclosures are selling faster than they’re being created, which is why inventory is shrinking.

Don’t get me wrong – as I’ve said many times – I think we’ve still got downside ahead of us. But clearly the buying activity we’re seeing at the lower end is better for the economy in general terms than if we weren’t seeing it, right?

Also, almost all of these newly-purchased REO properties will need work done: painting, new carpet, etc. And there will be lots of new furniture purchases as well. And mortgage brokers and real estate agents will get paid here (albeit a fraction of what they were making during the heyday). Again, we’re not headed back to 2005, but all of this foreclosure sale activity will put a little boost into the economy that wouldn’t have been there otherwise.

[carlsbadworker]

As much as I disagree with investors’ maths in claiming that this is the best time to buy, I do believe that risk-taking is what is needed to improve our standard of living over the long run. It is very easy to sit back and laugh at others, but these risk-taking investors are helping to put properties in better shape as a shelter for people who couldn’t afford to buy. They are doing the society a favor unlike bankers who sucked away trillions of tax payer dollars yet ran away with huge bonus checks.

[carlsbadworker]

As much as I disagree with investors’ maths in claiming that this is the best time to buy, I do believe that risk-taking is what is needed to improve our standard of living over the long run. It is very easy to sit back and laugh at others, but these risk-taking investors are helping to put properties in better shape as a shelter for people who couldn’t afford to buy. They are doing the society a favor unlike bankers who sucked away trillions of tax payer dollars yet ran away with huge bonus checks.

[carlsbadworker]

As much as I disagree with investors’ maths in claiming that this is the best time to buy, I do believe that risk-taking is what is needed to improve our standard of living over the long run. It is very easy to sit back and laugh at others, but these risk-taking investors are helping to put properties in better shape as a shelter for people who couldn’t afford to buy. They are doing the society a favor unlike bankers who sucked away trillions of tax payer dollars yet ran away with huge bonus checks.

[carlsbadworker]

As much as I disagree with investors’ maths in claiming that this is the best time to buy, I do believe that risk-taking is what is needed to improve our standard of living over the long run. It is very easy to sit back and laugh at others, but these risk-taking investors are helping to put properties in better shape as a shelter for people who couldn’t afford to buy. They are doing the society a favor unlike bankers who sucked away trillions of tax payer dollars yet ran away with huge bonus checks.

[carlsbadworker]

As much as I disagree with investors’ maths in claiming that this is the best time to buy, I do believe that risk-taking is what is needed to improve our standard of living over the long run. It is very easy to sit back and laugh at others, but these risk-taking investors are helping to put properties in better shape as a shelter for people who couldn’t afford to buy. They are doing the society a favor unlike bankers who sucked away trillions of tax payer dollars yet ran away with huge bonus checks.

[peterb]

From an investment aspect, this is extremely risky. RE is a highly leveraged and illiquid investment. It changes trends very slowly and is easily identifiable when it’s starting.
It is much safer to wait until RE shows a solid YOY rise and other fundamental economic factors turn positive. Sure, you dont get in at the bottom, but far more importantly, you dont get in before the bottom. Because no one knows where it is until there’s a solid and consistant rise.

[peterb]

From an investment aspect, this is extremely risky. RE is a highly leveraged and illiquid investment. It changes trends very slowly and is easily identifiable when it’s starting.
It is much safer to wait until RE shows a solid YOY rise and other fundamental economic factors turn positive. Sure, you dont get in at the bottom, but far more importantly, you dont get in before the bottom. Because no one knows where it is until there’s a solid and consistant rise.

[peterb]

From an investment aspect, this is extremely risky. RE is a highly leveraged and illiquid investment. It changes trends very slowly and is easily identifiable when it’s starting.
It is much safer to wait until RE shows a solid YOY rise and other fundamental economic factors turn positive. Sure, you dont get in at the bottom, but far more importantly, you dont get in before the bottom. Because no one knows where it is until there’s a solid and consistant rise.

[peterb]

From an investment aspect, this is extremely risky. RE is a highly leveraged and illiquid investment. It changes trends very slowly and is easily identifiable when it’s starting.
It is much safer to wait until RE shows a solid YOY rise and other fundamental economic factors turn positive. Sure, you dont get in at the bottom, but far more importantly, you dont get in before the bottom. Because no one knows where it is until there’s a solid and consistant rise.

[Author]

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